The General Department of Vietnam Customs noted that during the first half of August, the country’s cashew nut exports reached 21,500 tons, worth a total of US$146.2 million, representing a 10.1 per cent increase in volume and a rise of 9.3 per cent in value in comparison with the same period last month.

Since the beginning the year, cashew nut exports hit 261,200 tons, worth US$1.936 billion, a surge of 17.6 per cent in volume and a drop of 8.2 per cent in value compared to the same period last year.

The average export price of cashew nuts during the first half of August fell by 0.8 per cent to US$6,812 per ton in comparison with the same period last month. The average export price has fallen 21.9 per cent to US$7,415 per ton since the beginning of the year.

During the remaining months of 2019, the demand for cashew nuts in the global market is expected to rise with the cashew sector targeting the export of 450,000 tons of cashew during the year, according to Vinacas.

Experts have concluded that due to low export prices, the global demand for cashew nuts is forecast to increase in the short term, higher than the set target of 10 per cent.

Vinacas President Nguyen Van Cong believes that the price of cashew nuts is likely to rebound later this year with the world’s consumption demand for the food item projected to rise during the year’s fourth quarter.

Vinacas said the cashew industry is likely to face a number of challenges of processing and trading cashew nuts in the future due to stricter requirements being implemented by importing countries.

Most notably, demanding markets such as the United States and EU have announced that they are to apply additional food safety standards and inspect chemical residues on exports to their market.

The association also warned local cashew businesses about the need to further step up production and processing activities in a bid to supply their products to supermarkets in order to stabilize market prices.

With the escalating trade tensions, the global financial and monetary market is moving into a period of increasing risks during the remainder of the year. If the US-China trade frictions remain unresolved, fluctuations could continue to shake the financial market.

China has depreciated its currency to 7.04 yuan to 1 USD in an attempt to curb the negative impacts caused by the US tariffs levied on Chinese exports to the US.

A currency war could break out if economies continue to devalue their currency and lower interest rates. This would drag them into stagnation and then leading to a global crisis.

If yuan depreciation is kept on, it will put additional pressures on the Vietnamese dong (VND), making Chinese exports to Vietnam becoming cheaper, and worsening the latter’s trade deficit with the neighboring country.

Nguyen Tri Hieu, a financial expert, assumes that the devaluation of VND should stand at a rate of 3 per cent. Indeed, the level of VND devaluation remains moderate, meaning that there is plenty of room to depreciate VND in order to negate adverse impacts sourced by yuan depreciation.

However, the depreciation of VND could harm the local securities market as it could raise concerns among investors.

Since the beginning of the year, the financial market has absorbed a large amount of foreign capital inflows. If VND is devalued deeply, this will have a widespread influence on investment activities.

“There has been no phenomenon of moving cash flows from the securities or banking sectors to the gold market. But high gold prices may result in speculations and an investment shift”, Hieu noted.

Vietnam is regarded as a beneficiary from the US-China trade war. Indeed, many investors have planned to move their production facilities from China to Southeast Asian countries, including Vietnam. Tight control should be applied to stop the possibility that the production facilities ship Chinese goods to the Vietnamese market and have them relabeled as made-in-Vietnam products before being exported to the US.

Hieu suggested that amid soaring FDI inflows into the Vietnamese market, the Government should become more selective when choosing such investments in accordance with the overall economic development strategy.